Senate Proceeding on Apr 19th, 2010 :: 2:17:15 to 2:31:15
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2:17:12 to 2:17:33( Edit History Discussion )

Bill Nelson: in even writing a bill, is not serving our nation. there are things we need to do, and this is one o them. mr. nelson: mr. presint, i ask consent to speak up to 15 minutes. the presiding officer: witut objection. mr. nelson: and, mr. president, i want to speak on this legislation as well. this legislation that we're finding is strongly opposed by

2:17:15 to 2:31:15( Edit History Discussion )
Speech By: Bill Nelson

2:17:34 to 2:17:56( Edit History Discussion )

Bill Nelson: the wall street banks which have fared so very well at taxpayers' expense and now do not want any kind of legislation that will recall -- that will call them to have any kind of transparency and checks and balances on what

2:17:57 to 2:18:20( Edit History Discussion )

Bill Nelson: has been an intolerable situation. if this motion to proceed to the financial reform bill fails, obviously it's going to be the american taxpayer that is going to suffer. when we get around to considering the motion to

2:18:21 to 2:18:42( Edit History Discussion )

Bill Nelson: proceed, if it is denied, it a vote in favor of keeping the status quo. it's a vote in favor of of $700 billion bailouts, reckless financial risk taking and all the other problems that come with our current financial

2:18:43 to 2:19:04( Edit History Discussion )

Bill Nelson: regulatory system. is anybody satisfied with what we have been through over the past couple of years? i don't think a vast majority of the american people are satisfied. to the contrary, i think they are outraged on what they have seen on wall street, and thus

2:19:05 to 2:19:27( Edit History Discussion )

Bill Nelson: the need for wall street regulatory reform. mr. president, last week i had spoken on the need to reform compensation practices on wall street. i have put forth a specific proposal that will tie future tax deductions for huge

2:19:28 to 2:19:51( Edit History Discussion )

Bill Nelson: executive compensation at big financial institutions to the adoption of responsible performance-oriented compensation standards, and what i had suggested are standards that have been developed already by the federal reserve system and the financial stability

2:19:52 to 2:20:14( Edit History Discussion )

Bill Nelson: board, which is the council of major central banks. some financial institutions have already begun to implement these standards, but we need them to apply to all those maj financial institutions. it only takes one reckless and irresponsible institution to

2:20:15 to 2:20:35( Edit History Discussion )

Bill Nelson: wreak the havoc on our financial system. so by requiring the very largest banks to tie the pay of their highest paid executives to the long-termerformance of that financial institution, that's

2:20:36 to 2:20:57( Edit History Discussion )

Bill Nelson: sound, responsible reform that we should be able to agree on. and remember, it's already been adopted by the federal reserve board and the financial stability board, which is the uncil of major central banks. but today i want to address another important aspect of

2:20:58 to 2:21:18( Edit History Discussion )

Bill Nelson: financial reform that's related to this complicated thing called derivatives regulation and energy speculation. let's take derivatives. it's arcane, it's abstract.

2:21:19 to 2:21:41( Edit History Discussion )

Bill Nelson: it's something that folks don't understand. it's very difficult to understand. in essence, some of the examples i'm going to give are you can think of it as an insurance policy, a derivative. it's a derivation of normal

2:21:42 to 2:22:02( Edit History Discussion )

Bill Nelson: financial instruments, and some derivatives provide companies with legitimate backup insurance. it's a way risk in the marketplace, but the market for derivatives has gotten out of control.

2:22:03 to 2:22:23( Edit History Discussion )

Bill Nelson: many of those derivatives today are simply bets. basically, gambling bets between banks that do little, if anything, to benefit the nation's economy.

2:22:24 to 2:22:44( Edit History Discussion )

Bill Nelson: they help create financially speculative bubbles that increase prices, whether it's the prices at the gas purpose or in the checkout line at the supermarket, but also the experience that we have had that

2:22:45 to 2:23:05( Edit History Discussion )

Bill Nelson: increase the prices in our housing market. in the area of derivatives regulation, the committee bill creates some commonsense safeguards to improve accouability and transparency. over the last two decades, much

2:23:06 to 2:23:30( Edit History Discussion )

Bill Nelson: of the activity on wall street has moved away from traditional investment banking and asset managent and into this speculation on derivatives trading. for example, in the ten-year period between 1998 and 2008,

2:23:31 to 2:23:53( Edit History Discussion )

Bill Nelson: the value of derivatives, outstanding derivatives, grew from less than $100 trillion to nearly $600 trillion. now, they can play an important function in managing risk, whether it's an interest rate,

2:23:54 to 2:24:18( Edit History Discussion )

Bill Nelson: foreign exchange or energy price risk. but when you allow investors to leverage all of their investment , derivatives allow speculators to take on much more risk with much less capital, because the trading of derivatives is largely conducted

2:24:19 to 2:24:39( Edit History Discussion )

Bill Nelson: in unregulated over-the-counter markets, this reckless speculative position is taken by companies such as a.i.g. and others nearly brought down the financial system. and because derivatives are used to speculate on all types of

2:24:40 to 2:25:01( Edit History Discussion )

Bill Nelson: goods, not just securities,hey can have significant consequences in other parts of the economy. in early 2008, we saw the price of oil hit stratospheric heights, largely because of excessive speculation in oil and

2:25:02 to 2:25:24( Edit History Discussion )

Bill Nelson: energy derivatives. there are a number of us here in the senate who have worked to close the so-called enron loophole and clarify that energy derivatives should be traded on a regulated exchange and treated just like other commodities derivatives, and the financial

2:25:25 to 2:25:46( Edit History Discussion )

Bill Nelson: reform bill that comes to the floor addresses problems in derivatives in the marketplace by requiring that derivatives be traded through clearing houses and public exchanges. it authorizes the commodities futures trading commission to establish speculative position

2:25:47 to 2:26:08( Edit History Discussion )

Bill Nelson: limits on the amount of exposure that any one invtor can take. for example, if you're going to be buying and selling these things on the exchanges, that the person buying it instead of turning right around and trading it, they are going to have to

2:26:09 to 2:26:30( Edit History Discussion )

Bill Nelson: buy and keep a hold a certain percentage of the acquisition. well, these are important first steps, but the bill coming here from the committee should do more to protect the taxpayers, and it should do more to stop

2:26:31 to 2:26:51( Edit History Discussion )

Bill Nelson: the excessive speculation that can drive up prices and take, for example, gas prices. and i'm going to be offering an amendment to do just that. it's going to require that regulators set hard caps on the positions taken by energy

2:26:52 to 2:27:12( Edit History Discussion )

Bill Nelson: traders. in other words, there would be only a certain amount that they could buy of all that particular speculative product. it would eliminate -- my amendment would eliminate the loopholes in the bill that's

2:27:13 to 2:27:34( Edit History Discussion )

Bill Nelson: coming tohe floor that would allow these unwarranted exemptions from those limits, and the amendment would require that these limits be put in place by a date later this year. i'm concerned that the committee

2:27:35 to 2:27:58( Edit History Discussion )

Bill Nelson: bill coming retains current rules in the bankruptcy code that gives the so-called counter parties in derivative contracts special preferred treatment when a firm becomes insolvent. this special treatment ensures that wall street banks and other large traders are put at the

2:27:59 to 2:28:20( Edit History Discussion )

Bill Nelson: front of the line over an insolvent firm's customers. iant to give you an example there. it was most apparent in late 2008 when billis of taxpayer dollars were given to a.i.g.

2:28:21 to 2:28:43( Edit History Discussion )

Bill Nelson: which was deemed too large to fail, and then those taxpayer dollars in the bailout through the tarp funds actually flowed through two counter parties which were people that had bought these derivatives like insurance policies, and they

2:28:44 to 2:29:05( Edit History Discussion )

Bill Nelson: paid them off. goldman sachs received reived $13 billion from the taxpayers through the federal bailout of a.i.g. do you think that goes over well on the american main street when they see wall street saving -- having the federal government

2:29:06 to 2:29:26( Edit History Discussion )

Bill Nelson: saving a firm like a.i.g. and then it turns around and pays off on those speculave derivatives, in this case to goldman sachs for $13 billion? that doesn't go over very well, and it's not fair. well, we just simply need to

2:29:27 to 2:29:48( Edit History Discussion )

Bill Nelson: eliminate the special treatment that wall street banks and other financial firms that hold large derivative positions, we need to eliminate that special position that they receive in bankruptcy and liquidation process. and i'm going to offer an

2:29:49 to 2:30:09( Edit History Discussion )

Bill Nelson: amendment to clarify that those derivative counter parties like that insurance policy that i just gave the example that a.i.g. paid off goldman sachs, that those kinds of speculative ventures are never again going

2:30:10 to 2:30:30( Edit History Discussion )

Bill Nelson: to jump to the front of the line in the bankruptcy process ahead of whom? ahead of taxpayers, creditors. mr. president, it's time for us to move ahead with financial reform. and so when we get around to

2:30:31 to 2:30:52( Edit History Discussion )

Bill Nelson: just whether or not we're going to take up this bill, a vote against the motion to proceed to get to the bill is a vote against reform. it's a vote in favor of bailouts. the banking committee is a strong committee bill.

2:30:53 to 2:31:16( Edit History Discussion )

Bill Nelson: and i hope out here on the floor with amendment we're going to make it even stronger. i hope our colleagues will join us in this effort. mr. president, i yield the floor, and i suggest the absence of a quorum.